Colloquium Live-blogging, Nov. 10

This week's Colloquium guest is Doug Lowenstein, president of the Entertainment Software Administration. If my friend and former roommate Will actually read my journal, he would no doubt be delighted to know that I used his retail experience with parents buying GTA for their pre-teen children as an example in one of my questions.

The topic for this week is "What it will take for the video game industry to get bigger than Hollywood?"

The claim referenced in the title, of course, is that the video game industry is bigger than Hollywood, which isn't true; yearly gross revenue is (respectively) $28 billion to $44 billion. It's been about 30 years since Pong's release, but the modern industry was born in 1985, with the release of the Famicom/NES. More numbers: video game software sales were $8 billion last year, while hollywood box office was $9.2 billion. The false claim referenced above is asserted through combining hardware sales & software (~ $11 billion), and comparing it to box office revenues; however, the upward trend in game sales has led companies to forecast that in 2009 the gross revenue of the video game industry will surpass that of the music industry to reach $55 billion.

The question, of course, is whether the video game industry will ever surpass Hollywood.

The average age of gamers is 30, and even if you cut out people who only play hearts and solitare and the like on their PCs, the average age still hovers in the mid-to-late twenties. In addition, statistics indicate that most gamers have been playing games for around 10 years. Despite the dedication of gamers, however, the games industry has proven remarkably unable (or even resistant) to producing content that reaches beyond the traditional audience of hardcore gamers. The most egregious example of this is the lack of games that appeal to women. (And I say this as someone who has a fair number of female friends who play games.)

One of the concerns which Lowenstein brings up is the existence of "gamer shame", which causes female gamers to want to avoid being stigmatized by association with the cultural stereotype of the (male, badly socialized) gamer geek. This stereotype is perpetuated by the games industry's own marketing practices, among which is the feeling that the only games which make money are M-rated games. The average E -rated game last year moved 534k units, while the average M-rated game (excluding the blockbusters Halo 2 & GTA: San Andreas) moved 150k units-- and yet, because the industry is locked into a blockbuster mindset, wherein the only games that make money are the M-rated blockbusters, it's losing out on games with a much wider appeal.

Side note: Katamari Damacy won critically acclaim and several industry awards, but only moved 120k units, and thus is viewed as a commercial failure (500k units is the usual cut-off for commercial success) despite moving many more copies than Namco expected it would.

Lowenstein is arguing not for games that make you cry, but an increased acceptance of games as a medium worthy of creativity, critical examination, and being the topic of public conversation. (At parties, for instance. Wait, games *are* why my friends and I talk about at parties.) His suggested means to do so is by making games more complete & multi-dimensional, as well as making them easier to understand and to play. He also confesses to finding modern games too hard to play, and links this to the notion that modern games are driving away consumers by requiring so much mastery that people sell 200-page manuals to help people defeat them. (Price-point and length are also an issue; most non-gamers, and even 60% of gamers would buy more games if they were shorter and cheaper.)

I must admit to skepticism that the games industry needs more simple and shallow games, as Loewenstein argues, but I do accept that games need to be able to appeal to a much wider audience. (I must admit that shorter games sound a lot more appealing now than they did last year, too.)

The games industry, of course, has embraced online gaming and the internet with far more rapidity than any other media industry; this is to its advantage, especially as the current models of online gaming are well-suited to sidestep piracy as a problem. (When your primary revenue source is player subscriptions, you don't need the $50 up-front price quite as much.) Obviously, Asia is already a huge market for online gaming, particularly in Korea, but with EA moving their worldwide HQ for online gaming to Shanghai, the Chinese market will be a major influence in the future of online gaming. Mobile gaming is also an emerging market in Asia, with $193 million in Venture Capital invested in mobile games startups in 2004.

There's also the issue of the cultural status of games (Books = Good, Games = Bad), and the various state laws which been passed or which are in the process of being proposed to ban the sale of video games to minors. The less I say about the legal issues, the less I'll rant; at the same time, however, the issue of games' cultural status is one of great concern to me. I suspect that one of the primary issues is that the generation which grew up playing Nintendo hasn't made its way into the hallways of power, whether those hallways of power are political or cultural.